Women rare on boards in region / Silicon Valley 2005 numbers up but lower than nation's

Ryan Kim, Chronicle Staff Writer

Published
4:00 am PST, Thursday, December 15, 2005

Silicon Valley's leading companies made modest strides this year in recruiting women to their board of directors, although the region still falls far behind the rest of the country in diversifying its top executives, according to a new study.

Forty-four percent of Silicon Valley boards now include at least one woman, up from 41 percent in the previous two years, according to the 2005 Spencer Stuart Silicon Valley Index. Overall, women now account for 7.2 percent of the valley's board of directors, slightly up from 6.8 percent last year. Silicon Valley boards of directors average about eight members.

Among companies with revenue exceeding $5 billion annually, 92 percent have at least one woman on the board, compared with 78 percent last year. Of companies with revenue of less than $250 million a year, 39 percent include at least one female board member, up from 11 percent in 2004.

By contrast, 88 percent of the boards of S&P 500 companies have at least one female board member. Forty-nine percent of S&P 500 companies have two or more female directors compared with just 11 percent in the valley.

The paucity of female directors appears especially concentrated in California's technology sector. Of the 12 percent of the S&P 500 boards with no female directors, 43 percent are tech companies, and 29 percent are headquartered in California.

"While they are making gains here, women have yet to break into Silicon Valley boards in the same numbers they have in corporate America overall," said Nayla Rizk, co-author of the report. "If Silicon Valley boards are going to substantially increase female representation, they will need to reach deeper into the management infrastructure and give exceptional women at the vice president level an opportunity to serve on boards."

There are a number of factors that hamper the efforts of women trying to rise to the board level, said Kara Helander, vice president of the western region for Catalyst, a nonprofit research and advisory organization working to expand opportunities for women at work.

Helander said the tech industry historically draws more men to the field, making it harder to recruit female executives. But she said the industry also presumes itself to be a meritocracy built solely upon technological know-how.

As a result, many companies are slow to reach out and cultivate female leaders or acknowledge any informal networks that favor men. And in some cases, companies are also reluctant to recruit top female executives in other fields, who may contribute a broader range of expertise to various Silicon Valley boards.

"It's a matter of breaking down the stereotypes that a lot of organizations have that are subtle and not-so-subtle barriers to advancement," Helander said. They include barriers that exclude women from informal networks, high-visibility assignments and access to duties critical to obtaining senior leadership positions.

This is the third year of the Silicon Valley Board Index, which is compiled by the executive research firm Spencer Stuart. The study examined proxy reports for the valley's top 100 publicly traded technology companies.

The report also found:

-- Virtually all of the companies surveyed identified at least one audit committee financial expert, as mandated by the Sarbanes-Oxley Act. In 2004, 77 percent had done so, and only 11 percent had in 2003.

-- Slightly less than half of Silicon Valley companies added an independent director. Of the 81 new independent directors added this past year, six were women.

-- Silicon Valley directors were paid less than their S&P counterparts, averaging $31,750 in annual retainers, compared with $56,600 for S&P directors. For directors at the largest companies, with $5 billion in revenue annually, the compensation was virtually the same as the rest of the S&P 500.